OTTAWA — The federal transport regulator has dismissed charges by Canada’s largest shipping group that Canadian Pacific Railway Co. and Canadian National Railway Co. are illegally billing customers, the National Post reports.
In a ruling released yesterday, the Canadian Transportation Agency rejected a complaint from the Canadian Industrial Transportation Association that so-called accessorial fees for such things as late returns of rail cars are illegal.
“As the Canada Transportation Act is presently framed, the railway companies are free to conduct their business in any manner they see fit subject to the exceptions set out under the Act and under any general laws,” the agency ruled.
It rejected the association’s argument that the railways cannot charge accessorial fees because they are not spelled out in the Transport Act.
Aggrieved shippers who feel the railways are exploiting their market dominance can take their concerns to the Competition Bureau, it added.
The shippers’ group had complained the charges are excessive, often imposed arbitrarily and difficult to appeal. In one case cited, a grain shipper saw fees for holding cars rise to $75,700 a month from $7,600 in a year.
Both railways welcomed the ruling. They say the extra charges induce customers to use cars properly, returning them promptly and in good condition, for example, and this keeps fleet costs down.
“We argued from the outset that these charges were legal and are an important part of generating efficiencies in our system,” said Mark Hallman, a CN spokesman.
“The ruling shows regulatory intervention in everyday business is a thing of the past,” said Len Cocolicchio, a spokesman for CPR.
Both spokesmen said if customers have concerns, they should be resolved through dialogue.
The CITA, which represents 200 rail users who spend $6-billion a year on freight, said it is studying the ruling, including for a possible appeal.
“At first blush it seems the agency is radically reducing its jurisdiction on rail matters,” said Lisa MacGillivray, president of the CITA.
“It could be that the agency has pointed out this isn’t the forum and perhaps a more political route needs to be taken.”